Benchmarks trade slightly in red; Nifty slips below 10,400 mark

Indian equity benchmarks made a cautious start and are trading slightly in red in early deals with frontline gauges declining below their crucial 33,800 (Sensex) and 10,400 (Nifty) levels on Thursday tracking weak global cues. Traders opted to remain on sidelines ahead of Balance of trade figure for the month of February to be released later in the day. However, losses remained capped as traders took some solace with World Bank’s statement that India’s economy is expected to grow at 7.3% in the next financial year and accelerate to 7.5% in 2019-20, bottoming out from the impact of demonetisation and GST, even as it highlighted private investments and exports as the two lagging engines of growth. In its biannual publication, India Development Update, the World Bank said it expected Indian economy to clock a growth rate of 6.7% in the current financial year. Moreover, The World Bank is planning to raise lending to India by about $1 billion every year for the next five years from the current $3 billion to $3.5 billion. The lending will be mainly for infrastructure projects.

On the global front, Asian markets are trading mostly in red at this point of time after Wall Street declined amid concerns over heightened trade tensions. The US markets closed lower on Wednesday on rumors that the Federal Reserve will raise interest rates by a half-point when the central bank meets next week.

Back home, stocks related to real estate sector remained buzzing on a report stating that the market size of the Indian real estate sector is expected to reach $180 billion by 2020 with the housing sector contribution doubling to 11.2 per cent of GDP. In scrip specific developments, Himadri Speciality surged on planning to invest Rs 1,000 crore to expand Carbon Black business, while Wipro gained on entering into strategic partnership with Trintech.

The BSE Sensex is currently trading at 33788.93, down by 46.81 points or 0.14% after trading in a range of 33769.26 and 33855.74. There were 13 stocks advancing against 18 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.61%, while Small cap index was up by 0.43%.

The top gaining sectoral indices on the BSE were Healthcare up by 0.71%, Industrials up by 0.30%, Capital Goods up by 0.25%, Auto up by 0.25% and Consumer Discretionary Goods & Services up by 0.24%, while Oil & Gas down by 1.22%, Energy down by 0.83%, PSU down by 0.43%, Bankex down by 0.29% and Metal was down by 0.26% were the top losing indices on BSE.

The top gainers on the Sensex were Wipro up by 2.27%, Hero MotoCorp up by 1.21%, Dr. Reddys Lab up by 1.18%, Sun Pharma up by 1.07% and Tata Motors up by 0.72%. On the flip side, Bharti Airtel down by 0.95%, ICICI Bank down by 0.93%, ONGC down by 0.83%, Tata Steel down by 0.75% and NTPC down by 0.71% were the top losers.

Meanwhile, terming Indian economy as credible, the World Bank in its latest biannual publication has projected the country’s gross domestic product (GDP) growth at 7.3% for the next fiscal year 2018-19 (FY19) and added that growth will accelerate further to 7.5% in FY20. It said that growth will be supported by private consumption, investment, and exports. It also foresees that Indian economy will grow at the rate of 6.7% in the current fiscal year 2017-18 (FY18).

The report titled ‘India Development Update: India's Growth Story’ has observed that a growth of over 8% will require continued reform and a widening of their scope aimed at resolving issues related to credit and investment, and enhancing competitiveness of exports. It also said that the country’s GDP growth saw a temporary dip in the last two quarters of FY17 and the first quarter of FY18 due to demonetisation and disruptions surrounding the initial implementation of Goods and Services Tax (GST). It added that the Indian economy is expected to recover from the demonetisation and GST impact, and growth should revert slowly to a level consistent with its proximate factors -- that is, to about 7.5% a year.

The report further stated that India’s long-term growth has become more steady, stable, diversified and resilient. In the long-run, for higher growth to be sustainable and inclusive, India needs to use land and water, which are increasingly becoming scarce resources, make growth more inclusive and strengthen its public sector to meet challenges of a fast growing, globalizing and increasingly middle-class economy. However, it pointed out that financial markets’ liquidity may tighten, which may pose certain short-run risks for the economy. Besides, if investment, exports, credit do not gain sufficient momentum, it may not do much to accelerate GDP growth.

The CNX Nifty is currently trading at 10394.25, down by 16.65 points or 0.16% after trading in a range of 10387.10 and 10410.95. There were 20 stocks advancing against 30 stocks declining on the index.

The top gainers on Nifty were Wipro up by 2.23%, Dr. Reddys Lab up by 1.26%, Sun Pharma up by 1.24%, Hero MotoCorp up by 1.10% and Bajaj Finance up by 1.05%. On the flip side, Indian Oil Corporation down by 3.76%, BPCL down by 1.36%, HPCL down by 1.00%, ONGC down by 1.00% and Bharti Airtel down by 0.99% were the top losers.

Asian markets are trading mostly in red; Jakarta Composite declined 33.38 points or 0.52% to 6,349.24, FTSE Bursa Malaysia KLCI shed 5.84 points or 0.31% to 1,851.22, Taiwan Weighted slipped 4.26 points or 0.04% to 11,034.54, Shanghai Composite dipped 1.3 points or 0.04% to 3,290.08 and KOSPI Index down by 0.41 points or 0.02% to 2,485.67.
On the flip side, Nikkei 225 increased 23.64 points or 0.11% to 21,800.93 and Hang Seng up by 38.13 points or 0.12% to 31,473.14.